Trader's Glossary

CPI (Consumer Price Index)

Consumer price index is a monthly economic indicator that tracks the changes in the price of goods and services purchased by consumers. Consumer prices account for most of the inflation a country experiences. CPI is therefore an important indicator of changing currency values because rising prices can lead to central banks raising interest rates in order to counter-balance inflationary pressures. When CPI comes in lower than expected this tends to be good for the currency in question.